Wednesday, June 15, 2011

Sino Forest quote of the week

TRE [Sino Forest] had some notable blocks / drops of other awkward questions. TRE cut off the Nomura analyst Anissa Lee rather than answering her question asking for more details on where the cash balances are kept.

Management also failed to attempt to answer a question about whether its banks are uncomfortable with extending credit. Instead of answering, there was a death ray type of sound toward the end of the question, and the questioner was no longer there. In true memory hole fashion, management moved onto the next questioner without making any statement in response to the question.

6 comments:

Robert in Chicago
said...

You can use a more neutral source. Here are tidbits from FT Alphaville's live coverage of the call. ("Noise on the line" = death ray.) Note RBS is the only broker maintaining its buy rating, so perhaps the death ray really was inadvertent.

JMNomura on nowJMFrom NomuraJMQ: “is the company in compliance with all the planting regs in China?”JMA: YesJMQ: can you put the docs online?JMA: if we’d done things wrong, they’d have already informed usJMQ: what is the current cash level of the company?JMA: 1.1bn end of MarchJM“some of the cash has been used in normal operations”JMbut no major acquisitions or purchsesTAOoohTAThey just shutdown the Nomura ladyJMwill disclose the rest at end of JuneJMyupTAOnly three questions allowedJMsmack down

JMBack to RBS TAAgain?TAExternal funding againJM“What are your banks telling you now?”JMAnd then lot’s of noise on the line.TA(A Reader – sadly I am listening to the webcast, am not on the call)TAUh ohTARBS has been silenced

The Globe & Mail has just written a surreal editorial: "Carson S. Block of Muddy Waters' relentlessly hyperbolic comparisons of Sino-Forest to Bernard Madoff and Ponzi schemes, and his relentless repetition of the word 'fraud,' undermine his own credibility, even if he eventually turns out to be right."

So basically, if you find a Ponzi scheme and a fraud, then using those terms will undermine your credibility. Even if those companies are later demonstrated to be Ponzi schemes and frauds. Huh?

Here is a much better transcript of the RBS portion of the TRE-X call:

Operator: Your next question comes from the line of [indiscernible] (1:02:46) from RBC - or I'm sorry, RBS. Your line is open.

Q: Thank you very much. I just have one question. Given the external funding has always been a very important component for your business historically, can you just give us a sense of your banking relationships now?What are - what are banks telling you now, are they expressing concerns if any banks [indiscernible] (1:03:12) any of the credit line? And also on the [Inaudible] (1:03:22)?

A - Louisa Wong: Well, I think it probably got cut actually. The line was quite bad. So maybe operator, can you pick the next one please?

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